Trump’s Immigration Plan Would Cut GDP $555 billion, Require $330 Billion in Spending

Published November 10th, 2015 by Ryan Whitacker

Donald TrumpEarly on in the presidential campaign, Donald Trump said he would deport all illegal immigrants and send Mexico the bill. Many thought Trump would back off these claims, but he so far hasn't taken anything back. We calculated the cost of building a wall and deporting immigrants to be a minimum of $330 billion – 237% of Mexico's entire tax revenue. Deporting every undocumented worker would also remove 8.2 million workers from the workforce, which would immediately reduce US GDP by $555 billion and leave a labor shortage of at least 4 million jobs.

Trump's Immigration Policy

Trump has talked tough on immigration policy (and everything else), but come under fire for being vague. To combat that criticism he's now released a policy paper on the topic, which gives more specifics. Among those specifics: make Mexico pay for the wall, triple ICE (Immigration and Customs Enforcement) agents, detain and deport everyone caught trying to cross, and end birthright citizenship (citizenship for children of illegal immigrants for in the country). The paper also suggests cutting back on nearly every worker visa program. It's worth noting that the policy paper only mentions deportation in regards to gang members, but Trump has continued to suggest we deport all illegal immigrants on his campaign trail.

The whole immigration debate raises some interesting data-based questions, and that's where we come in.

  1. How much would it cost to send every undocumented immigrant to Mexico in Trump's 2-year timeframe?
  2. Would Mexico even be able to pay for wall? What about the cost of deportation?
  3. What would the impact on US GDP be if every undocumented immigrant were deported?

Deportation

We'll handle the first three questions on deportation first, since they're much easier to answer. Firstly, how much would it cost to deport all 11.4 million illegal immigrants? Trump has claimed there might be 30 to 34 million. I don't see any credible data to back this number up, but we'll run the calculations both ways just to see.

Homeland security estimates $8,661 per person for current deportation costs, but this is with present policy and little attempt made at finding people unless they've committed a crime. The Center for American Progress (CAP) estimates an average of $10,070 per person to deport everyone, or $115 billion for all. This is a decent figure at current policy, but if fails to take two major things into account: the increase in personnel needed to deport so many people (a massive cost), and the fact that apprehending illegal immigrants will become increasingly difficult. CAP admits this is a very conservative figure.

We find a more realistic figure from this analysis, which takes into account increased personnel costs and the fact that some immigrants would leave voluntarily. Apprehension costs are still too low to find people who don't want to be found, but we can be conservative and estimate $26,300 per person.

Homeland security figures

11.4 million illegal immigrants

$26,300 per deportation

Final cost: $300,833,000,000 ($300 billion)

Trump figures

30 million illegal immigrants

$26,300 per deportation

Final cost: $791,666,000,000 ($792 billion)

For reference, $300 billion is enough money to pay for everyone going to public college – including room and board.


 

The Wall

Unbeknownst to some, we already have a partially-complete border fence along the Mexican border. So far it has cost about $5.3 million per mile. With 1,954 miles of border, a complete fence would cost at least $10 billion total. This is a pedestrian fence; the proposed wall would span the entire border and cost a good deal more. One comparable wall is the Israeli West Bank barrier, which has so far cost about $12 million per mile (274 miles at $3.4 billion). The barrier is mostly fence, but about 10% is concrete. . It also costs over $250 million per year to maintain. Even at these prices the Mexico wall would cost around $23.5 billion. Given that no one has tried to build such a “wall” since the (relatively short) Berlin wall, we looked into the construction of a single meter of fence vs. wall and extrapolated.

A conservative estimate for the final wall would cost at least $30 billion, plus a minimum of $750 million per year in maintenance. $40-$60 billion seems more likely over the difficult California-to-Texas terrain, but in all cases we'll try to use the conservative figure.


 

The Bill to Mexico

In the end, Trump would have to bill Mexico roughly $330.8 billion to cover deportation and wall-building costs. Mexico's total GDP is about $1.26 trillion, and their total tax revenue was about $241 billion in 2014 (19.1% of GDP). Mexico is already struggling to pay the bills and collect taxes – would receive a bill that's more than double all taxes (+237%). Needless to say, this bill would be a huge stretch for a country that has less than 1/5th the GDP per person compared to the United States.

Mexico's leaders have already scoffed at Trump's suggestion, calling it “enormously ignorant.” Even if they were willing to pay the bill it's highly unlikely the country could without collapsing economically and politically.


 

United States GDP Impact

Estimated GDP is where things get really data-heavy. GDP (Gross domestic product) is the total value of goods and services produced in the country. The United States GDP was about $16.77 trillion in 2013. It doesn't include black market and unreported activities, which are estimated at $2 trillion in the United States. We're going to use the $18.8 trillion estimate that includes the “unofficial economy” or black market.

Pew estimates that the median household income for an illegal immigrant household is about $36,000. Average household size for illegal immigrants is 3.1 persons vs. the national average of 2.4. (Interesting side-note: that means income per capita is about half of the US average). The total income from these 3.68 million households comes out to around $132 billion. Because all of this is in exchange for goods and services, it's part of GDP – less than 1% of the $18.8 trillion.

Income isn't the full story, of course. Comparing total USA income to GDP, we see that Americans make about $6.8 trillion in wages, which is only about 36% of GDP. So if the same ratio held for illegal immigrants we'd see the GDP drop about $365 billion (2%). But both Pew and EPI have calculated that immigrants tend to contribute more to the national GDP, and the illegal immigrant population is more likely to be working (8.1 million of 11.4 million = 71% vs. 63% for all Americans). EPI estimates that immigrants contribute about 14.7% to the overall economy despite making up 13%. If the 29% of those immigrants who are illegal contribute at similar rates, we'd be down $788 billion (4.2%) for 2015.

The right number is probably somewhere in the middle. As it turns out, a more thorough study in California found undocumented workers contribute $130 billion to GDP. About 23% of illegal immigrants live in California, so that number extrapolated to the rest of the nation is $555 billion (3%). This is the best number to use, since it was a direct study of GDP contribution by the undocumented group, and contains the fewest assumptions. 3% might not sound like a lot, but it would erase about 2 years of economic growth (based on 2004-2014).

GDP estimates don't even account for industry shrinkage and losses to global competitors. In reality we'd be looking at a massive shortfall in agriculture, where 6 in 10 workers are undocumented (IPUMS said 60.5%). These jobs pay an a median salary of $9 per hour, and that's the “official” number that businesses report to the government. Farms would either have to cut production or raise labor costs. Whether you increase the cost of production or reduce supply, food costs go up. Increased food prices have always hit the poor hardest, since they spend a greater percentage of their paycheck on food.

Wouldn't Americans fill the jobs?

Some – like the anti-immigration groups Center for Immigration Studies (CIS) and the Heritage Foundation – have argued that jobs would be picked up by American citizens. Let's examine that claim. There are currently 7.9 million unemployed Americans. BLS data includes undocumented workers: the best data shows that about 200,000 undocumented workers are unemployed (lower than the national rate). Illegal immigrants account for about 5% of the total labor force in the United States at 8.1 million undocumented workers. We're already short 400,000 workers, and that's assuming everyone, including engineers and doctors, are willing to take jobs like farm work.

0% unemployment doesn't happen. People move, get fired, or quit; it takes some time to connect with and get hired by a new employer. If we assume the USA's historically low unemployment of 2.5% (3.6 million), every unemployed American's willingness to relocate and to take an immigrant job (regardless of skill level), we'd be short an absolute minimum 4 million workers. So to answer the question: it doesn't even matter if Americans are willing to do the dirty work. There simply aren't enough people.


 

What about illegal immigrants taking advantage of the system?

There's a lot of bad information out there on illegal immigrants “leeching” off the system. For example, there's a common sentiment that immigrants drain federal resources. The data actually shows that immigrants pay more into healthcare than they take out, pay billions into social security they never claim (most undocumented immigrants ARE paying taxes on payrolls), and don't receive tax credits most low-income American workers receive because they fear deportation. In reality most federal programs require proof of US citizenship.

If you go looking for more data, make sure you understand the context. CIS, for example, riled people up by revealing that illegal immigrant households take an average of $2,700 more in taxes than they pay in, largely through Medicaid. That number (a big bullet point on the top) is meaningless in isolation because it lacks the context of an average low-income American pays in and takes out. If you're not looking closely you'll miss the fact that this is half (65%) the benefits the average American household receives. Adjusting for household size, we see that the average American claims about 280% more than the average illegal immigrant in federal benefits.


 

Would Trump's immigration policies be a good idea?

That's for you to decide – we're here to provide the data. Here's what the data shows:

  • Mexico isn't going to be paying the $330 billion bill.
  • Even if they are, the American economy would take a huge $555 billion hit to GDP.
  • Without current illegal immigrants, the United States would face a massive labor shortage in low-income jobs, especially agriculture.
  • With lower demand or higher supply-side costs, food prices would rise, which would hurt low-income Americans most.

Did we miss something? Forget to add something to the totals? Let us know what you think about Trump's immigration policies.

Ryan Whitacker is a data freak, Excel ninja, and open data fanatic. He combines these skills to put together analysis in hopes it will help you make a better decision.

Image of Donald Trump courtesy of Gage Skidmore

1 thought on “Trump’s Immigration Plan Would Cut GDP $555 billion, Require $330 Billion in Spending

  • Terrific post! Many people ignore data, history and reality and insist that gut feelings and dogma > math and science. Willful ignorance #republicans. “The data actually shows that immigrants pay more into healthcare than they take out, pay billions into social security they never claim (most undocumented immigrants ARE paying taxes on payrolls), and don’t receive tax credits most low-income American workers receive because they fear deportation. “

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